How to Create an Exchange Traded Fund
Updated on Monday 26th November 2018
Rate this article 3 reviews
What are exchange traded funds?
The exchange traded funds (ETFs) are investment vehicles that are addressed to individual investors. Investors interested in setting up an investment fund that provides multiple options of investments can set up the EFT, which accepts almost all categories of asset classes.
Businessmen can invest through an ETF in the following:
• all classes of alternative assets.
An ETF can own a wide set of assets, such as:
• shares of stocks;
• gold bars;
• foreign currencies.
of the ETF’s assets
are divided into shares
and when setting up this type of fund
it will be necessary to select a legal entity
, as prescribed by the national investment legislation
available where the vehicle
is set up. The business forms available for an ETF
can vary depending on the selected jurisdiction.
Shareholders’ rights in an ETF
Investors who are interested in setting up an investment fund
will usually need to set up a legal entity
for a specific type of vehicle
. The business form will be established by the company’s shareholders
, who are entitled to a part of the company’s profit
. In the case of company representing an EFT
, the shareholders
will be able to receive a proportion of the profits,
in the form of dividends
or earned interest
It is important to know that the company’s shares can be bought by other investors and thus, the fund can be represented by other shareholders.
The advantages of ETFs
is considered a mutual fund
that can invest
in a wide category of assets
, as mentioned earlier. One of the main advantages of the ETF
refers to the fact that the investors may perform trading activities
(buying or selling) at any time
during a trading day
, unlike the mutual fund
, which may only perform this activity at the end of the day
At the same time, the investors are allowed to apply a set of investment strategies, which are not available for all types of funds.
Businessmen are invited to contact our partners
for consultancy services regarding the registration of an ETF
in a top investment destination